MORE THAN WORKERS LOST IN LAYOFFS

Companies today are losing their corporate memory and losing their competitive advantage as a result. With each new layoff, more corporate memory is lost.

Companies that do not recognize the value of corporate memory and do not take steps to retain it are losing assets not easily replaced.

Corporate memory is the collective business experiences, dramas, visions, successes and failures of real people who work for a company. We draw on corporate memory's lessons each time we solve problems, sell products and services, interact with customers, develop new technologies or design marketing campaigns. It is the knowledge, nuances and intuition we bring to day-to-day decision-making.

That some corporations needed to trim down to be more competitive cannot be argued. We do wonder, however, about the soundness of many of the radical layoffs that have seen 3 million layoff announcements since 1989.

Do we not value corporate memory? Of course we do. For evidence, consider the growing use of contractors and consultants. Who are these contractors and consultants? Many times they are the same employees who have been laid off.

Why?

Former employees who return as contractors or employees cut right to the issue of corporate memory and do not have to be reacclimated to the specifications, problems and nuances of the job.

Layoffs will continue. With each layoff it is possible to lose more of the texture, drama and lessons of corporate experience. Corporate vision is difficult enough to instill without risking its loss through wholesale layoffs that deplete the collective business lessons of the past. We have lost much if no one is left to know the experiences that exist or what their content means to current decisions.

When considering to lay off an individual or an entire division, employers must weigh corporate memory along with the dollars and cents of how much is being saved by eliminating the individual's salary and benefits.

There is a cure for losing corporate memory. Employers need to set up a system by which to measure an employee's value to the company beyond just dollars and cents. An individual, for example, who has significant experience in dealing with customer service and has forged close customer relationships should be carefully evaluated before becoming a potential dischargee.

In the final analysis, cutting out the memory of an organization may do more harm than good to the bottom line. If, after layoffs are made, the company can no longer perform at the level it once did, customers will take their business elsewhere and the business will be left in worse condition than before the layoffs.

Corporations that recognize the value of their corporate memories and continue to apply them may enhance their position in the marketplace.